July 26, 2006 - The extension of the Australian wine tax rebate to New Zealand wine exported to Australia is estimated to be worth up to $10 million a year to New Zealanders says Trade Minister Phil Goff.
"The rebate which came into effect this month is a concrete example of the value we get from the trans-Tasman Closer Economic Relationship.
"Without it, New Zealand wine exporters would be forced to pay the Wine Equalisation Tax introduced by Australia in their 2004 budget, without any rebate. That would make them less competitive in the Australian market.
"An arrangement between the New Zealand Inland Revenue Department and the Australian Tax Office was signed earlier this year. All technical arrangements for the extension of the Wine Equalisation Tax (WET) rebate scheme to New Zealand wine exporters are now complete. New Zealand wine producers can now submit applications to the Inland Revenue Department for tax paid during the previous Australian tax year.
"The WET is effectively the excise on Australian wine. It is charged on the wholesale price of wine sold in the Australian domestic market. The rate of tax is 29 percent.
Wine exports to Australia for the year ending September 2005 amounted to 9.7 million litres, a 49% increase since 2004, making Australia our third largest destination for wine exports.
After representation from New Zealand Ministers, Australia agreed in December 2004 to extend the WET rebate scheme to New Zealand producers to ensure conformity with the Australia New Zealand Closer Economic Relations Trade Agreement.
"Following an announcement in the Australian budget of May 2006, wine producers are eligible under the scheme for an increased maximum rebate of A$500 000 per year, up from A$290 000 previously.
"New Zealand wine exporters with questions about how the proposed rebate extension will operate should contact the Inland Revenue Department," Mr Goff said.